Glut Guts Land Deal

A $1.1 million land deal between a real estate developer in Texas and the city of Fayetteville collapsed last month because of a glut of apartments in the market.

“Their biggest concern was the amount of housing already available here,” says Charles Venable, assistant director of public works for Fayetteville.

“The general consensus was they were afraid of the market in Fayetteville,” says Mark Brewer, executive broker of Realty Executives Metro Brokers Inc. of Fayetteville who was handling the transaction. “They think it is getting softer instead of stronger.”

D.J. Hammond & Associates of Austin, Texas, had signed a contract with the city earlier this year to buy 20 acres at the intersection of Razorback and Cato Springs roads. The city’s water and sewer department operations have been located on the land for the past 35 years.

Hammond had planned to raze the city’s buildings and build a 162-unit apartment complex on the land. However, the contract allowed the company to withdraw its offer at any time prior to closing the sale. Hammond exercised that option in a letter to the city dated June 10.

“We were sure disappointed,” Venable says.

The city already had preliminary drawings of a new operations center it planned to build on land it owns along Morningside Drive. Those plans have been delayed and the land remains, unofficially, for sale.

“If somebody made an offer, I’m sure we’d look at it,” Venable says.

Brewer says Hammond still would like to have property in Fayetteville but now wants to buy an existing apartment complex instead of building a new one.